Labor Rates

[tirengolf]

I am a newbie here guys, I have a Tire and Repair Shop in the Panhandle of Florida. My father opened in 1961as a Tire, brake and alignment shop. We have adapted to the change of 1 stop shopping , Thanks to Sam Walton. Our labor pricing is going crazy down here it is skyrocketing for our area. I see a trend around our area that the independent will surpass the Auto dealerships in hourly rate. I have raised my rate to 100.00 hour and no one bats a eye. People in our area are just starving for honest businesses. I am fortunate, although we have worked very hard over the years. I am turning away customers almost seems I am picking and choosing who to work for. I have 10 stalls with 7 racks, 2 alignment . I am curious if other areas are seeing this trend, I am really considering putting in 2 or 3 locations to relieve my store. It is really crazy. I will tell you guys one thing I have done that has been a huge money maker for me, aluminum wheel repair , straighten, curb rash and painting. I start at 150 and go to 300, It generally takes me 15 to 3 minutes to straighten 1 wheel. I literally have 2 to 5 calls a day on it. I fix some curb rash with a small file and airbrush, I a paint allover body shop guys does them for 30.00 cash. I never take the tire of the wheel. Also most need a new tire with a bent wheel. I heat them and straighten them. I wish I would have done that 5 years ago. So Long, David

[mspecperformance]

im moving down to florida!

[phynny]

West Virginia was the same way and here in Indiana the rates are pretty equal.

[phynny]

West Virginia was the same way and here in Indiana the rates are pretty equal.

[skm]

I have worked at a station for the last 24 years. The labor rate started at 38.50 an hour when I started , I have been trying to get the owner to up his rate since it has been at 90.00 for the last 7 years. I have been telling him that the cost of living has gone up every year and our pay has stayed the same so we are behind as far as pay. I am in Maryland and I am pretty sure the labor rate around here is much more like 100+ . That is one reason I am really thinking about starting my own repair shop , people will pay for honest and quality work with out batting an eye. Look at the price of gas it goes up , yes people may complain , but do they stop buying it?? No . Is anyone from the Maryland area? if so what are your rates?

[ScottSpec]

I have worked at a station for the last 24 years. The labor rate started at 38.50 an hour when I started , I have been trying to get the owner to up his rate since it has been at 90.00 for the last 7 years. I have been telling him that the cost of living has gone up every year and our pay has stayed the same so we are behind as far as pay. I am in Maryland and I am pretty sure the labor rate around here is much more like 100+ . That is one reason I am really thinking about starting my own repair shop , people will pay for honest and quality work with out batting an eye. Look at the price of gas it goes up , yes people may complain , but do they stop buying it?? No . Is anyone from the Maryland area? if so what are your rates?

I don't know what part of Maryland you are in but we just went to $100 after being at $95 for over 5 years and we are in the most affluent area of Maryland just outside of Washington DC. I know of only one other independent that is $100 or more. I'm with M-Spec. I'm moving to Florida.

 

Scott

[Mario]

The Chevrolet dealer by my shop is at $60/hr. I have held estimates from customers and they quote right at book time and even offer aftermarket parts vs dealer.

 

The Euro dealer (volvo, jag, VW) downtown is $100/hr, other domestic dealers 70-80. Most Independents are $65-75, with the national chains being all over the place with price and routinely more expensive then the dealers.

[Handson]

You have to look more local then state. Everyone should be calling 10 local shops every now and again to compare labor rates (use a friends phone). If your good and honest and want to stay busy put yourself among the top three most expensive.

[xrac]

Last October I attended a meeting sponsored by Jasper Engines and Transmissions with a presentation by the CEO for independent shop owners. Upon registering Jasper asked for the labor rate at every shop and reported the results at the meeting. We are here in the hinder lands in the mostly rural Midwest/southeast. The shops represented were from Southern Indiana, Southern Illinois, and Western Kentucky. The reported labor rates ranged from $48-$109 per hour. The average was $78. If one had excluded the shops from the smaller towns I am sure the average would have been in the low to mid $80's. Our current labor rate is $90.00.

[ATLAuto]

The reported labor rates ranged from $48-$109 per hour.

 

Good gracious ... I cannot even imagine staying open at $48/hr. Even in a garage behind my house. How do these shops stay in business?

 

For the record, we called every shop in town before opening. Made a massive spreadsheet of labor rates by neighborhood. Then, set ours at the mid to upper side of that curve. $109.99/hr. This also allows us to hit 70% margin on labor.

[GeeZ]

Guys, be careful about discussing this in too much depth on a forum like this. FTC is always looking for what they believe is

collusion to fix prices.

[Mario]

Guys, be careful about discussing this in too much depth on a forum like this. FTC is always looking for what they believe is

collusion to fix prices.

We are discussing going open market prices for labor in areas all across the United States.

Edited August 17, 2015 by Mario

[GeeZ]

Just letting you know. All it takes is for a group to discuss it for the FTC to launch an investigation. BTW, insurance companies are exempt from price fixing by law.

[andresauto]

We are discussing going open market prices for labor in areas all across the United States.

Open market pricing in aftermarket automotive repair already exists, so I do not quite understand the discussion. In auto body repair with all the government/insurance regulations open market pricing is non-existent on insurance regulated claims which there are market caps on parts and labor.

Only on custom work, some sublets, and non-insurance related jobs are there reasonable margins possible for auto body shops.

 

As for aftermarket automotive repair ...

 

...for example, our shop labor rate is dependant on different factors that are easily understandable and by differentiation of jobs by risk factor of employee and vehicle, intelligence and ability required, value of vehicles (classics, customs, exotics), and equipment necessary to do a job. On a bare basic example, a shop down the road charges $10.00 per each wheel/tire to balance each wheel/tire. We get paid $35.00 each to balance each tire plus $1.00 each per ounce of weights used. Does not include mounting.

 

Another example, our basic general labor price is $125.00 per hour on general labor, a shop down the block is $84.00 an hour for general labor and even another claims that they are $65.00 for general labor.

 

The Volvo dealer 6 miles away is $160.00 per labor hour. The local Mercedes dealer is over $200.00 per hour in labor.

 

On our exotic end we have been as high as $325.00 per hour for labor, depending on the value of the vehicle, the exclusivity of the client and what exactly they want, the time of operations (sometimes I have to start a job at 1:00 am with no hassles, distractions, etc.), equipment procured, and the supplemental insurance required.

 

This above is open market pricing.

 

If the industry goes regulation bound, as in not open market pricing the restrictive nature of producing an income will produce a lower class of technician with lower quality workmanship. The technicians in this industry are already too underpaid because of a cut throat fear based labor pricing system.

With a low paid industry you typically attract low educated individuals who do not have the IQ or aptitude to produce good quality products.

 

If your not to certain about this, go to your local fast food establishment and see if you can find highly intelligent/skillful people working long term at these low wage operations.

 

Basically highly intelligent/skilful employees do not equate low paying labor jobs as a long term solution for survival for themselves or their families regardless of how good the working conditions may be. The uneducated but willing though are thankful to have jobs and will work for their money(lower income) but lack the education to produce high quality products. That does not mean they are hopeless, but initially they are productive on very low levels. They are laborers not technicians.

 

Then the cycle begins:

They are laborers and not technicians unless you highly train them into professionals.

 

Then these laborers turned professionals, knowing their increased value and rightfully deserving to be paid more, look for raises or higher paying jobs. If the business can afford to pay the raises and higher salaries it will attract and retain professionals. If it cannot, due to low labor rates, regulations, and/or inefficiencies, that shop or industry is doomed to a low level survival potential or failure for the company and its staff.

 

And the cycle starts all over again.

 

_______________________________________

 

 

There is prosperity where there is knowledge and ability, but there is no hope where ignorance of facts exist.

For basic financial prosperity: Income must be greater than expenses.

Expenses × 5 = MINIMUM Income necessary for security.

[FROGFINDER]

If your customer thinks your worth it than charge ALL YOU CAN FOR YOUR BEST WORK EVERY TIME!

[LynxStarAuto]

Well I'm located in Miami, Fl. I cannot vouche for TC's experience. Here in Miami competition is fierce. Ppl care not how good your are, rather where it can be done the cheapest. Most shops here are in the range of 70-80/hr. My rate is 85.00 and that is only because I specialize on Euros, and many other Euro shops fall in that range. About the only elevated fee I have is a 120.00 diagnostic fee. This is because I have OEM scan tools and have access to certain systems, and certain features some aftermarket tools do not on these vehicles. I charge my fee and guarantee that what I say the issue is, will be the fix. Outside of that, my rate is on par with every other shop in the area. A 100/hr rate won't get you too much business here.

[CMillet86]

I'm a couple hours from Mario, and my labor rate is $70, thats on the upper end of the independent scale in my area.